By Adedapo Adesanya
Brent crude soared close to $85 per barrel on Friday, October 15, boosted by forecasts of a supply deficit in the next few months as the easing of coronavirus-related travel restrictions spurs demand.
The global crude benchmark traded at $84.88 per barrel after gaining 88 cents or 1.05 per cent, while the United States West Texas Intermediate (WTI) gained 1.51 per cent or $1.23 to trade at $82.54 per barrel.
This meant Brent has posted a weekly rise of 3 per cent, which would be its sixth straight weekly gain while WTI made a 3.5 per cent gain in the week, putting it on track for an eighth consecutive weekly rise.
Demand has picked up with the recovery from the COVID-19 pandemic, with a further boost from power generators who have been turning away from expensive gas and coal to fuel oil and diesel.
A sharp drop in oil stockpiles in the United States and the member countries of the Organisation of Economic Co-operation and Development (OECD) is expected to keep global supply tight.
This is after top oil producer, Saudi Arabia, rejected calls for additional supply from the Organisation of the Petroleum Exporting Countries and allies (OPEC+) and the International Energy Agency (IEA) said surging natural gas prices could boost demand for oil among power generators.
The Paris-based IEA on Thursday said the energy crunch is expected to boost oil demand by 500,000 barrels per day.
That would result in a supply gap of around 700,000 barrels per day through the end of this year, until OPEC+ add more supply, as planned in January.
The market also got a further boost as the US government said it will lift COVID-19 travel restrictions for fully vaccinated foreign nationals effective November 8, which should boost jet fuel demand.
The unprecedented travel restrictions kept millions of visitors out of the United States from China, Canada, Mexico, India, Brazil, much of Europe and elsewhere; shrinking tourism; and hurt border community economies.
